LOWER COSTS AND HIGHER WAGES 201 
general increases in consumption and general purchasing 
power. This expansion in the demand for commodities, it 
was assumed, would in turn also make possible further 
wage advances and prosperity, for the reason that the wid- 
ening demand for and consumption of manufactured prod- 
ucts would enable greater economies to be realized through 
mass production. 
Since the year 1923, therefore, American industry has 
proceeded more and more upon these assumptions. Wage- 
cuts as a means of heading off depressions have been dis- 
carded as a worn-out fallacy. Increases in wages have 
been urged as a substitute. 
PurcHASING PowER or CoNsuMPTION URGED AS THE 
DoMINANT FACTOR IN PROGRESS 
So far as wage rates are concerned, the result of the 
adoption of this new view of progress has been indeed sur- 
prizing. The consuming power of the people has increased 
by leaps and bounds. Production has not only been guided 
at a comparatively even pace with advances in consump- 
tion, but has also been made to yield an increasing quantity 
of commodities at a lower level of prices. Standards of 
living of industrial employees throughout the country have 
risen to heights never before attained. 
What had been accomplished in this direction prior to 
1923, and never realized, has been cited as an earnest of the 
still greater achievements possible. It has repeatedly been 
pointed out on all sides that there has been a great growth 
in our power to consume, due to greater productivity; that 
the increased use of what were formerly regarded as lux- 
uries has not been an extravagance or any retrenchment 
upon savings, but “the product of better organized effort” 
and a condition of continued prosperity. By way of illus- 
tration the Secretary of Labor, Mr. James J]. Davis. has